Guide for Investors in Malaga
Maybe you already heard all the controversy last year about the implementation of the cadastral reference value when you buy an apartment to invest.. In this article, We explain what the cadastral reference value is, What is its difference with the cadastral value and how can you check it?. Besides, We show you how it affects taxes and, the most important thing, how it can help you invest correctly and transact (whether buying or selling a property) with more benefits.
What is the cadastral reference value?
The cadastral reference value is an indicator used to calculate various taxes related to the purchase of a home, such as the Property Transfer Tax (ITP), the Tax on Documented Legal Acts (IAJD), Inheritance and Donation Tax (ISD) and the Wealth Tax. This value, similar but potentially lower than market value, It is calculated annually based on the average of the purchase and sale prices of the previous year in the area where the property is located..
The General Directorate of the Cadastre is responsible for calculating it and making it available to citizens.. Therefore, It is essential to know this value when valuing a property, since it can influence the price at which a buyer is willing to pay.
Buy an apartment to invest
Investing in real estate can be an excellent way to grow your wealth. Knowing the cadastral reference value is crucial to make informed decisions and maximize the benefits of your investment..
What is the difference between the cadastral value and the cadastral reference value?
Although both values may seem similar, have significant differences. The cadastral value is an administrative value used to calculate the Real Estate Tax (THE PLACE). It is updated every 10 years and is the responsibility of the local council. Does not consider the market value of the property, but other parameters that are often arbitrary.
On the other hand, The cadastral reference value is based on the market value and is used to calculate taxes related to the purchase of a property. This value is managed by the General Directorate of the Cadastre.
In summary, The cadastral value is used for local taxes and does not reflect the market value, while the cadastral reference value is based on the market and is used for taxes on the transfer of property.
How to check the cadastral reference value to buy an apartment?
To consult the cadastral reference value, follow these steps:
- Access the website of the Electronic Headquarters of the Cadastre.
- Look for the option “Consult reference value” and select the type of property.
- Enter the cadastral reference number (NRC) of the property and click on “Consult”. The NRC is a unique code that identifies each property and can be found on any IBI receipt or in the property deeds..
- Identify yourself using your DNI data or permanent password.
- Indicates the purpose of the query (“Informational effects”), Enter the cadastral reference and the NIF, and click reference value.
The system will show you the cadastral reference value of the property.
Why is the cadastral reference value important in the purchase and sale of a property??
The cadastral reference value is crucial in real estate investment because it directly influences sales taxes.. For example, If you sell a property for a price higher than the cadastral reference value, the buyer must pay additional taxes based on the difference between the sale price and the cadastral reference value.
How does the cadastral reference value affect taxes when purchasing a property??
The cadastral reference value is used to calculate various taxes, such as the Property Transfer Tax (ITP) and the Tax on Documented Legal Acts (IAJD).
Property Transfer Tax (ITP): This tax is paid when purchasing a property and depends on the declared value of the property.. If the market value is greater than the cadastral reference value, taxes will be paid on the market value.
Tax on Documented Legal Acts (IAJD): This tax is paid when formalizing a notarial document and is based on the value of the property. If the declared value is higher than the cadastral reference value, The tax will be calculated on the declared value.
Conclusion: Knowing the cadastral reference value is vitally important when you buy a property
Knowing the cadastral reference value is essential when buying a property, as it affects the total price the buyer will pay due to the associated taxes. Taking this value into account will help you better evaluate the purchase of a property and make informed decisions..
Remember that our agents in Novatropolis are at your disposal to arrange free advice and help you with everything related to your real estate investment.. Contact us today!